Commentary from the Center on Budget & Policy Priorities Issues titled “Little Noticed Build Back Better Would Improve Affordability of Health Coverage”

WASHINGTON, December 9 (TNSPol) – The Center on Budget and Policy Priorities posted the following comment:

Through Tara Straw

Director of Health insurance and market policy

The House– Passage of Build Back Better (BBB) ​​legislation would dramatically improve access to coverage in health insurance markets by extending improvements to the American Rescue Plan premium tax credit until ‘in 2025, reducing the premiums people pay for a plan. At the same time, lesser-known BBB provisions would also significantly improve the affordability of market coverage and reduce unexpected claims for refund of premium tax credits. The law project :

* Improve the affordability of coverage for workers. Currently, people are not eligible for a premium tax credit if they have an employer-sponsored coverage offer that is considered affordable (costing less than 9.61% of income for employee-only coverage. in 2022). BBB would reduce this percentage so that employer coverage is only considered affordable if it costs no more than 8.5 percent of income. This would bring the affordability percentage into line with the maximum that a person eligible for a premium tax credit would pay in the market until 2025. If the premium for an employer plan exceeds the threshold of 8.5 %, the employee may instead be entitled to a bonus tax credit for the market. blanket. (For example, insurance would be considered unaffordable for a single full-time worker who earns $ 25,000 if it costs more than $ 177 per month – compared to $ 200 under current law – making them potentially eligible for a $ 37 in the market, a substantial saving.) An employer’s offer would not preclude people with incomes below 138 percent of the poverty line (approximately $ 18,000 for a single person) of eligibility for the tax credit on premiums.

* Only 1.6 million of the nearly 160 million people covered by the employer would cease to be covered by the employer as a result of this provision, largely because fewer people are accepting their offers of coverage, according to the Congress Budget Office. This means that the provision provides much needed relief to workers with the highest premiums, especially those with lower incomes, without undermining the coverage offered by the employer. Reducing the affordability percentage to allow more employees to qualify for a premium tax credit would have the added benefit of solving the so-called family problem for some of the families it affects. . Under current regulations, family members are not eligible for the premium tax credit when the employee’s offer of coverage is affordable, even though premiums for family coverage are prohibitive. Making more employees eligible for financial assistance would also make their families eligible, although a broader solution to the family problem is still needed. Additionally, the bill would suspend affordability percentage indexation – an adjustment that can increase the percentage slightly from year to year – until 2026.

* Make insulin more affordable. About 7 million people depend on insulin for their survival, but the cost of the most common types of insulin has tripled in the past decade. While insurance protects some people from high costs, many still struggle to afford treatment, including more than one in four low-income and privately insured with high-deductible plans. Beginning in 2023, the bill would reduce insulin costs for people with commercial insurance through the individual market (including markets) or their employer by limiting cost sharing to the lesser of $ 35 or 25 percent of the rate negotiated by the insurer for a 30-day supply. It would also require plans to cover certain insulin products before meeting the deductible and would count all out-of-pocket expenses in the member’s deductible and reimbursable maximum. This could disproportionately help blacks and Hispanics, who are over 50% more likely to have diabetes than non-Hispanic whites. (Those covered by Medicare prescription drug benefit would also pay a cost share for insulin of up to $ 35 per month.)

* Reduce the likelihood that people who receive a lump sum Social security disability insurance payments will unexpectedly have to repay large amounts of premium tax credits. Some disabled people registered in the market receive a lump sum Social Security payments that span multiple years of benefits and are granted retroactively, and this temporary increase in income can cause them to owe thousands of dollars in refunds of premium tax credits. If someone receives a premium tax credit up front to pay monthly premiums, they should reconcile it on their tax return by comparing the amount of the advance based on an income projection to the authorized credit based. on real income at the end of the year. If the credit paid in advance exceeds the authorized credit, the registrant must repay all or part of it. A lump sum Social Security may make year-end income significantly higher than the previous projection.

* If and when someone will earn their Social Security claim is difficult to predict, making the projection of market income uncertain. The average processing time for a call from a Social Security the decision to apply was 506 days in 2019, and that time frame has likely increased due to processing delays related to the pandemic. The bill would definitely ignore the lump sum Social Security income attributable to previous years for the purposes of calculating the tax credit on premiums, remedying a problem that the IRS ‘ Taxpayer Advocate Service called it “draconian”.

* Help unemployed people get affordable coverage. Many people who lose their jobs also lose their health coverage. The bill would provide a zero-premium market plan and the highest level of cost-sharing assistance to the unemployed in 2022. This same provision of the US bailout extended coverage to more than 200,000 unemployed during the period. special registration from HealthCare.gov in 2021, including more than 34,000 people in the Medicaid coverage gap who otherwise had incomes too low to be eligible for premium assistance. (The bill would close the coverage gap until 2025 in states that have not extended Medicaid, providing crucial access to coverage for those on very low incomes.)

* Do not take into account a part of the dependent income which is often difficult to estimate. Currently, if a child or other dependent unexpectedly has to file an income tax return because he or she earned more than expected, for example from a work-study position or small children jobs, his full income should be included in family income. This is used to determine the premium tax credit the family is entitled to and can lower their eligible credit. But these revenues are particularly difficult to project at the start of the year and, in rare cases, can lead families to have to repay large amounts of their advance tax credits. For dependents under the age of 24 who fall into this category, the bill would exclude the former $ 3,500 income depending on the calculation of household income.

* Create options for states to reduce direct spending and stimulate innovation. The bill creates two possibilities for public funding to reduce costs for consumers. From 2023, States could access the “Improve the Health Insurance Affordability Fund“for costs related to reinsurance – which reduces premiums by providing federal payments to insurers to help offset the cost of large medical claims – or to provide additional premium or cost-sharing assistance to consumers in markets or a basic health program. 10 billion dollars per year, would be approved until 2025. (States that have not expanded Medicaid cannot apply; the federal government, however, will use a portion of program funds to establish reinsurance programs in states without expansion. ) The bill would also authorize funding in 2022 to help states develop exemptions for state innovation (“Section 1332”), which allow states to seek alternatives to certain policies in the Healthcare Act affordable as long as they meet certain standards.